We are strong believers in the impact of foresighting but as researchers, beliefs are far from being enough… So obviously, when you find a longitudinal analysis that specifically checks the performance of firms regarding their expertise in foresighting, you are pretty happy. Rorberk and Kim did precisely that job by developing a Firms’ Corporate Foresight Maturity Level Index :
They base their index on a mix of « Perceiveing, Prospecting & Probing » that they call the « 3Ps ». Aside of the fact that it is fairly close from the marketing « 4Ps », the approach raises an interesting question : if it is easy to conceive that perceiving (as in weak signals analysis) and prospecting (as in scenario planning) are part of Corporate Foresight. But, we are really ont sure about Probing. Basically, this is all the « Practices through which firms move from what Gavetti and Levinthal called ‘cognitive search’ in the perceiving and prospecting phase to ‘experimental search’ in the probing phase ». Basically, anything that is related to acceleration, entrepreneurship or maybe innovation falls into that category, that seems a bit large then.
In any case, the idea of having an aggregated index for firm’s corporate foresighting (CF) approaches is nice, even more when it is put in perspective with CF needs, which the authors also do. They offer the following index based on environmental complexity and environmental volatility :
This gives the authors the opportunity to capitalize on Day and Shoemaker’s analytical grid who have theorized that there are basically four types of companies regarding CF:
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The vigilant one, a firm has CF practices that are adequate for its given environment.
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The neurotic one, a firm has CF practices that exceed its needs for a given environment.
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The vulnerable one, a firm that has CF practices that fall one level short of what would be required to match the need.
- The one in danger, a firm that has CF practices that fall more than one level short of what would be re- quired to match the need.
After having done all this, the authors go into detailing their sample:
We are not surprised by the fact that more than half of the companies in the sample are in need of CF. What is more interesting is to see the end result, which is that almost 40% of the companies in the sample are vigilant ones. Too Many people in the design fiction or CF environment tend to claim that companies are not ready for tomorrow or not many sufficient efforts, which is clearly shown wrong here. Again, facts can be useful versus beliefs…
But the most important part of the analysis is the conclusion : do companies that are vigilant have higher profitability that the others ?
To put it in a nutshell, yes they do. Vigilant companies are 33% more profitable than the average companies. And the ones in danger avec 44% less profitable than the average.
Now, this all seems fine but it reminds us of that design council analysis some years ago where they compared the valuation of companies using design or not. And obviously, the ones using design outperformed the others. Looking at just one variable to explain a company’s performance or market valuation is extremely limited and we have issues taking the results per se. Our feeling here is that a company that has invested in CF might have also invested in design, innovation, supply chain etc. An interesting approach would be to check for the relationship between CF, sensibility to the environment, managerial agility, composition of the board etc.
Such an approach would maybe allow to go further that single causality, and a denser and richer approach.